5. To whom can an NRI sell residential or commercial property without seeking any specific approval?

An NRI can sell residential or commercial property in India to a person resident in India or to an NRI or a PIO.

6. Can a PIO sell residential or commercial property without any prior approval?

A PIO can sell residential or commercial property in India only to a person resident in the country. For transfer to any other person prior approval from the RBI is required.

7. To whom can an NRI or a PIO transfer, through sale, his agricultural land, plantation property or farmhouse in India without any prior approval?

Under general permission, NRI/PIO may sell his agricultural land/plantation property/farm house in India to a person resident in India who is a citizen of India.

8. Can an NRI or a PIO transfer, through mortgage, their residential or commercial property to an authorized dealer or housing finance institution in India?

Yes.

9. Can an NRI or a PIO transfer by way of mortgage their residential and commercial property in India to a party abroad?

No, prior approval of the RBI is required.

10. Under general permission available what is the payment mode for the purchase of residential or commercial property in India by an NRI or a PIO?

Under general permission, an NRI or PIO may purchase residential or commercial property in India out of funds remitted to India through the normal banking channel or funds held in his NRE/FCNR (B)/ NRO account. No consideration shall be paid outside India.

11. Can the refund of application, earnest money or purchase consideration made by housebuilding agencies or sellers due to the non-allotment of flat/plot/cancellation of bookings/deals for the purchase of residential/commercial property together with interest, if any (net of income tax payable thereon) be credited to an NRE account?

Yes, it can, provided that the original payment was made through inward remittance or by debit to an NRE/FCNR (B) account. For this purpose, RBI permission is not required and the authorized dealer may be approached directly.

12. Can an NRI or a PIO take a loan from an authorized dealer against the security of funds held in their NRE Fixed Deposit account/FCNR (B) account for the purpose of acquisition of flat/ house in India for his own residential use?

Yes, subject to certain terms and conditions as provided in the applicable provisions of the FEMA

regulations.

13. Can an NRI or a PIO take a housing loan in Rupees from an authorized dealer or housing finance institution in India approved by the National Housing Finance Bank for the purchase of residential accommodation or for repairs/renovation/improvement of residential accommodation?

Yes, subject to certain terms and conditions. The borrower can repay such loans through inward remittance through the normal banking channel or by debit to their NRE/FCNR (B)/NRO account or out of rental income derived from renting out such property. Such loan can also be repaid by the borrower’s close relatives through their accounts in India by crediting the borrower’s loan account.

14. Can an NRI avail of a ‘Rupee’ housing loan from his employer in India?

Yes, subject to certain terms and conditions.

15. Can an NRI or a PIO repatriate the sale proceeds of residential or commercial property in India acquired through inward remittance via the normal banking channel or by debit to an NRE/FCNR (B)/NRO account? If so, what is the quantum?

An NRI or a PIO may repatriate the sale proceeds of residential or commercial property in India acquired through inward remittance via the normal banking channel or by debit to an NRE/FCNR (B) account. The amount to be repatriated should not exceed the amount paid for the acquisition of residential or commercial property (a) in foreign exchange received through the normal banking channel or by debit to an FCNR (B) account or (b) the foreign currency equivalent, as on the date of payment, of the amount paid by debit to the NRE account. The sale proceeds of residential or commercial property in India acquired through debit to an NRO account cannot be repatriated and should be credited to the NRO account only.

16. The Rupee loan availed by an NRI for the purchase of residential accommodation was repaid either by inward remittance or by debit to the NRE/FCNR (B) account. Can the sale proceeds of such property be repatriated?

Yes. Loan repayment in foreign exchange is considered equivalent to the foreign exchange received for the purchase of residential accommodation.

17. Is there any lock-in period for the sale of residential or commercial property purchased out of inward remittance/debit to NRE/FCNR (B) account?

No lock-in period is applicable for the sale of such property.

18. Is there any restriction on the repatriation of sale proceeds of residential property purchased by an NRI or a PIO out of funds remitted to India through the normal banking channel or funds held in their NRE/FCNR (B) account?

Yes. The repatriation of sale proceeds is restricted to not more than two residential properties.

19. Can an NRI or a PIO rent out residential or commercial property purchased out of foreign exchange/Rupee funds, if not required immediately?

Yes. As current income, rent received may be credited to an NRO/NRE account or remitted abroad.

20. Can an NRI who had acquired immovable property - residential or commercial property, agricultural land, plantation property or a farmhouse - in India while he was a person resident in India continue to hold or transfer such immovable property? In which account should the sale proceeds be credited?

Yes, under the provisions of Section 6 (5) of the Foreign Exchange Management Act, 1999, an NRI who had acquired immovable property in India while he was a person resident in India may continue to hold such property. Under general permission, he may transfer through sale or gift, agricultural land/plantation property/farm house in India to a person resident in India who is a citizen of the country and may transfer, through sale or gift, residential/commercial property in India to a person resident in India or to an NRI or a PIO. The sale proceeds may be credited to an NRO account.

21. Can a PIO who had acquired immovable property - residential/commercial property/ agricultural land/plantation property/farm house - in India while he was a person resident in India continue to hold or transfer such immovable property? In which account should the sale proceeds be credited?

Yes, under the provisions of Section 6 (5) of the Foreign Exchange Management Act, 1999, a PIO who had acquired immovable property in India while he was a person resident in India may continue to hold such property. Under general permission, he may transfer agricultural land, plantation property or a farmhouse in India through sale or gift, to a person resident in India who is a citizen of the country and residential or commercial property in India through sale to a person resident in India and through gift residential or commercial property in India to a person resident in India or to an NRI or a PIO. However, if a PIO is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan, they should seek prior approval of the RBI for the transfer of such immovable property in India. The sale proceeds may be credited to an NRO account.

22. Is the benefit of indexation available to NRIs?

Yes, the benefit of indexation will be available to an NRI on income arising from the transfer of longterm capital assets, except income arising from the transfer of shares or debentures of an Indian company acquired in foreign exchange or on bonds/debentures (except capital-indexed bonds).

23. What will the cost of acquisition be in the case of inherited assets at the time of computing capital gains?

In case an asset is acquired through inheritance, the cost of acquisition means the cost at which the previous owner of the property acquired it. This cost will be increased by the cost of any improvement of the assets undertaken by the previous and present owners.

24. Does brokerage and stamp duty constitute part of the acquisition cost while computing capital gains?

Brokerage and stamp duty paid on the purchase of capital asset is added to the cost of the capital asset. Further, the benefit of indexation is available on such cost while computing capital gains.

25. What happens if an individual is unable to reinvest the proceeds from the sale of a long-term capital asset up to the date of submission of income tax returns?

If the new asset is not acquired until the date of submission of Income Tax return to claim exemption of capital gains, the taxpayer will have to deposit the money into the Capital Gains Deposit Account Scheme with a nationalized bank until the proceeds remain unutilized. However, the new asset must be acquired by withdrawing from the account within the given time limit; otherwise, the unutilized amount will become chargeable to tax.